Proposes a constitutional amendment relating to taxation

SECOND REGULAR SESSION
[TRUL Y AGREED T O AND FINALL Y P ASSED]
SENA TE SUBSTITUTE FOR
SENA TE COMMITTEE SUBSTITUTE FOR
HOUSE COMMITTEE SUBSTITUTE FOR
HOUSE JOINT
RESOLUTION NOS. 173 & 174
103RD GENERAL ASSEMBL Y
6854S.13T 2026
JOINT RESOLUTION
Submitting to the qualified voters of Missouri an amendment repealing Sections 4(d) and 26
of Article X of the Constitution of Missouri, and adopting two new sections in lieu
thereof relating to taxation.
Be it r esolved by the House of Repr esentatives, the Senate concurring ther ein:
That at the next general election to be held in the state of Missouri, on T uesday next
2 following the first Monday in November , 2026, or at a special election to be called by the
3 governor for that purpose, there is hereby submitted to the qualified voters of this state, for
4 adoption or rejection, the following amendment to Article X of the Constitution of the state of
5 Missouri:
Section A. Sections 4(d) and 26, Article X, Constitution of Missouri, are repealed and
2 two new sections adopted in lieu thereof, to be known as Sections 4(d) and 26, to read as
3 follows:
Section 4(d). 1. In enacting any law imposing a tax on or measured by income, the
2 general assembly may define income by reference to provisions of the laws of the United
3 States as they may be or become ef fective at any time or from time to time, whether
4 retrospective or prospective in their operation. The general assembly shall in any such law set
5 the rate or rates of such tax. The general assembly may in so defining income make
EXPLANA TION — Matter enclosed in bold-faced brackets [thus] in the above bill is not enacted and is
intended to be omitted from the law . Matter in bold-face type in the above bill is proposed language.
6 exceptions, additions, or modifications to any provisions of the laws of the United States so
7 referred to and for retrospective exceptions or modifications to those provisions which are
8 retrospective.
9 2. Notwithstanding any prov ision of this constitution to the contrary , the general
10 assembly shall enact legislation to redu ce and eliminate the state individual income tax
11 by r equiring reduc tions to the top rate of the individual income tax based on reven ue
12 gr owth until such tax is eliminated. Upon the elimination of the individual income tax,
13 the general assembly shall be pro hibited fr om enacting or imposing any state individual
14 income tax.
Section 26. 1. In order to prohibit an increase in the tax burden on the citizens of
2 Missouri, state and local sales and use taxes (or any similar transaction-based tax) shall not be
3 expanded to impose taxes on any service or transaction that was not subject to sales, use or
4 similar transaction-based tax on January 1, 2015.
5 2. (1) Notwithstanding any pr ovision of this constitution to the contrary ,
6 including subsection 1 of this section, for the purpose of reduci ng and eliminating the
7 state individual income tax and reduc ing local tax rates, state and local sales and use
8 taxes (or any similar transaction-based tax) may be expanded by legislation to impose
9 taxes on transactions involving any goods and services. For the purposes of this section,
10 the phrase "for the purpose of red ucing and eliminating the state individual income tax
11 and redu cing local tax rates", with res pect to legislation enacted by the general
12 assembly , means that the legislation express ly states the general assembly's finding that
13 such legislation will direc tly lead to the redu ction and elimination of the state individual
14 income tax as prov ided in subdivision (2) of this subsection, and will direc tly or
15 indir ectly lead to the red uction of local tax rates as prov ided in subsection 3 of this
16 section.
17 (2) Any expansion of the sales and use tax base or incr ease in the state sales and
18 use tax rate enacted for the purpose of redu cing and eliminating the state individual
19 income tax and r educing local tax rates shall be offset in the same legislation by a
20 r eduction in the top rate of individual income tax that re duces such tax reve nues, less
21 r efunds, by an amount that is at least substantially equal to r evenues generated by such
22 expansion of the sales and use tax base or increa se in the state sales and use tax rate,
23 and, if such legislation is enacted within five years of the effective date of this
24 amendment, shall not be consider ed new annual revenu e for the purposes of Section 18
25 (e) of this Article and shall be exempt fr om the pr ovisions of Article IV , Sections 30(b),
26 30(c), and 30(d) of this Constitution.
27 3. (1) Notwithstanding any pr ovision of this constitution to the contrary ,
28 beginning twelve months fro m the effective date for legislation in which the general
SS SCS HCS HJRs 173 & 174 2
29 assembly expands the sales and use tax base pursuant to subsection 2 of this section, any
30 political subdivision that imposes a sales or use tax shall, in the manner pro vided by law
31 enacted by the general assembly , make a one-time adjustment to one or mor e of the
32 following rates of tax imposed by the political subdivision to reduc e the amount of
33 r evenue generated ther eby in an amount that is substantially equal to ninety-seven
34 per cent of the additional rev enue pr oduced by any expansion of the sales and use tax
35 base authorized by this section:
36 (a) The sales and use tax rate;
37 (b) The levy imposed on pr operty in class 2;
38 (c) The levy imposed on prop erty in subclass (1) of class 1;
39 (d) The levy imposed on all class 1 pr operty if such political subdivision imposes
40 a single rate of levy on all such pr operty; or
41 (e) The rate of any tax imposed on earnings.
42 (2) Notwithstanding the pr ovisions of subdivision (1) of this subsection to the
43 contrary , no political subdivision shall adjust its local tax rates in a manner that r esults
44 in any r eduction in funding to any public schools within, or serving, such political
45 subdivision.
46 4. Notwithstanding any pr ovision of this constitution to the contrary , beginning
47 twelve months fr om the effective date for legislation in which the general assembly
48 expands the sales and use tax base pursuant to subsection 2 of this section, each sales
49 and use tax rate imposed dir ectly by this constitution, with the exception of the rate
50 imposed under Article XIV of this Constitution, shall, in the manner pro vided by law
51 enacted by the general assembly , be adjusted in order to red uce the amount of tax in an
52 amount substantially equal to the amount of tax pr oduced by any sales and use tax base
53 expansion authorized by this section. The state auditor shall be r esponsible for
54 calculating the reduce d rates that will go into effect as pr ovided in this subsection.
Section B. Pursuant to chapter 1 16, and other applicable constitutional provisions and
2 laws of this state allowing the general assembly to adopt ballot language for the submission of
3 this joint resolution to the voters of this state, the of ficial summary statement of this
4 resolution shall be as follows:
5 "Shall the Missouri Constitution be amended to:
6 ● Phase-out the individual income tax based on revenue growth;
7 ● Reduce personal property and other local taxes when local revenues increase;
8 ● Modify the sales and use tax to eliminate income tax and reduce local taxes; and
9 ● Protect local funding for public schools and other purposes?".
✔
SS SCS HCS HJRs 173 & 174 3